Principle Decision No. 1484 of the Capital Markets Board has been published

With the publication of Law No. 7518 on the Amendment of the Capital Markets Law No. 7518 published in the Official Gazette No. 32590 dated July 2, 2024, and the subsequent Capital Markets Board (“Board“) announcement dated July 2, 2024, the actions to be taken by stakeholders regarding crypto assets and the relevant dates are specified in Turkish legislation.

The Board, with its decision dated September 19, 2024 (“Principle Decision“), specified the basic principles regarding the transition process. Key considerations behind these principles are the existence of a wide variety of assets in practice, the necessity to assess whether those assets fall within the scope of crypto assets that must be listed, the necessity to regulate customer’s instructions given through various methods, and the necessity to regulate platforms’ announcement activities along with issues relating to the protection of investors.

With the caveat that the duties and authorities of institutions and organizations arising from other legislation regarding crypto assets are reserved, the Principle Decision, consisting of 12 articles, addresses the following issues:

Within the scope of the Capital Markets Law (“Law“), in principle, the crypto assets of the customers shall be kept in customers’ wallets, whereas the crypto assets that the customers do not want to keep in their own wallets may be held in custody by banks or other institutions authorized by the Banking Regulation and Supervision Agency (“BRSA”) to provide crypto asset custody services. The cash must be kept in banks. In order to ensure that all fund flows regarding the cash belonging to customers and crypto assets, which are separate and kept separately from the assets of crypto asset service providers, are separated from cash and carried out in a registered manner through banks and other authorized institutions, two basic rules for implementation are specified:
- Accounts to be opened on behalf of clients shall be clearly identified as belonging to the platform client, and any misuse of such accounts is prohibited.
- Cash transfers of platform customers may only be made through banks and other authorized institutions. Platforms are prohibited from receiving, delivering, and keeping the custody of the cash within the platform.
Customer orders must be received via the registered website, mobile application, or the phone number of the authorized personnel of the platform and cannot be received through different social media platforms. All data and records kept in relation to the permitted methods must be kept in an unalterable and unforgeable manner as of November 8, 2024.
- The status of platforms cooperating with different institutions or providing transaction flow through different institution interfaces must be examined separately according to the interface design, data flow, and the relevant website and mobile application in each concrete case. Considering the customer protection aspect of this rule, in principle, customer orders should not be received through a website or mobile application that has not been notified to the Board, even via an interface or API connection.
Except for the permitted media and methods, trading, initial sale, distribution, clearing, transfer, and related custody transactions of crypto assets and cash conversion of customers’ crypto assets and vice versa as a regular occupation, commercial or professional activity by working through over-the-counter or alternative digital channels such as foreign exchange offices, will be considered as unauthorized crypto asset service provision and will be subject to the sanctions specified in the Law.
Non-fungible tokens (“NFT”) and crypto assets used solely to create or provide items in virtual games are excluded from the listing principles indicated in the Law. The provisions of the Law do not apply to those who only carry out the trading, initial sale, distribution, clearing, transfer, and custody transactions of these crypto assets. However, platforms included in the List of Operating Companies published under the Board’s announcement dated July 2, 2024, are required to notify the Board if they trade these assets after the publication of the relevant Principle Decision No. 1484. It is mandatory to carry out transactions related to these assets on a separate market to inform the investors on the platforms where these transactions are carried out with the disclaimer, “The assets traded on this market are outside the listing principles of the Capital Markets Law No. 6362 and are not subject to the supervision and audit of the Capital Markets Board” and to confirm that the said information message has been read and understood by the investor. The following points stand out in relation to this rule:
- Firstly, the Principle Decision shows that the Board does not use the authority granted to it by the Law to determine the principles for the sale or distribution of crypto assets, other than crypto assets that provide rights specific to capital market instruments, which are created through the development of distributed ledger technology or a similar technological infrastructure and whose value cannot be separated from this technology, on platforms without being subject to the provisions of the Law regarding capital market instruments, for NFTs and crypto assets exclusively dedicated to games.
- Secondly, it is noteworthy that the translation “nitelikli fikri tapu” for non-fungible tokens has started to be used in connection with the Law. Although there are various opinions regarding the accuracy of this translation, it should be emphasized that the main issue that distinguishes NFTs from other crypto assets is their non-fungibility and that their features may vary according to each type of NFT.
- Finally, although not explicitly stated in the Principle Decision, the NFT and game-specific crypto assets to which the Law will not apply must not provide rights specific to capital market instruments. As it is possible to issue crypto assets that have NFT-like features, are allocated for a game, and provide rights specific to capital market instruments due to the dynamic nature of crypto assets, this scope should be analyzed separately for each asset.
The activities of organizations whose primary function is to provide pricing information to platforms and conduct transactions based on those prices, but which do not provide services falling within the scope of the definition of a platform under the Law are not considered platform activities at this stage.
- This constitutes a clarification of the Law. However, since such entities may be in close contact with the trading cycle of crypto assets, it is useful to make this explicit in the Principle Decision.
The transactions on behalf of oneself but on the account of a third person on peer-to-peer digital marketplaces that enable the purchase, sale, and exchange of crypto assets directly between their users as a regular occupation, commercial, or professional activity may be considered unauthorized crypto asset service provision within the scope of the Law and those engaged in the relevant activities must terminate their activities until November 8, 2024.
Certain crypto assets that are linked to other existing regulations cannot be listed on platforms, and crypto assets cannot be issued based on certain underlying assets, considering that the custody infrastructure and proof of reserve mechanisms of crypto assets have not yet become operational. In addition, new sales and distribution can be made by platforms in relation to the already listed crypto assets that fall within these categories, and the assets that have already been sold and distributed will be allowed to be converted into cash or transferred between customers in accordance with customer demands.
Platforms must be objective in all kinds of publications, announcements, advertisements, and notices regarding the services they may offer. Any incomplete, inaccurate, or misleading publications that may mislead customers and guarantee commitments regarding returns and losses, except as permitted by the legislation, are prohibited.
Promotional campaigns that promise a return to customers, direct them to invest in one or more crypto assets, provide any benefit or benefit to the persons who bring customers to the platform by any means or to the persons who become members of the platform in this way are prohibited, and such campaigns must be terminated within 15 days as of September 19, 2024, the date of publication of the relevant Principle Decision.
It is stated that the necessary integrations for the data transfer that the platforms are required to make to the Central Securities Depository (Merkezi Kayıt Kuruluşu AŞ, hereinafter “MKK”) pursuant to the legislation must be made within the scope of the principles and timetable to be stipulated by MKK.
A restriction limiting the sale of crypto assets to the amount held in platforms’ wallets has been imposed for the cases where the platforms act as the counterparty to their customers. In the matching transactions of the customers, the platform is responsible for the presence of the relevant crypto assets in the relevant accounts and the transfer.
Platforms are prohibited from disposing of the client’s crypto assets and cash in favor of themselves or third parties.
- This is in line with the principle set out in the Law that clients’ cash and crypto assets are separate from the assets of crypto asset service providers.
- It should be reminded that pursuant to the Law, cash and crypto assets of customers in the custody of crypto asset service providers cannot be seized, pledged, included in the bankruptcy estate, or subject to interim injunction, even for public receivables, due to the debts of crypto asset service providers, and the assets of crypto asset service providers cannot be seized, pledged, included in the bankruptcy estate, or subject to interim injunction, due to the debts of customers.
Platforms are prohibited from conducting crypto asset lending transactions, transactions that would result in a loan to the client and leveraged transactions. Open positions and transactions within this prohibition’s scope will need to be closed in a way that does not aggravate the client and within an appropriate transition period.
In cases where crypto assets are not kept in the customers’ own wallets, the control over the keys of the wallets on the platforms where the crypto assets in the customer accounts are kept must be transferred to the platforms by November 8, 2024, and the practices contrary to this will be considered as an embezzlement crime in crypto asset service providers.

To review our previous article titled “Amendments on Capital Markets Law on Crypto Assets,” please follow this link.

To review our previous article titled “Capital Markets Board Continues to Shape the Framework for Crypto Asset Service Providers,” please follow this link.

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